Canada confirmed this week that it will not take on a target under an extension of the Kyoto Protocol following the completion of the first commitment period, 2008-2012. Given that Canada is likely to miss by a wide margin its current target under the first commitment period, this decision may not be surprising, but it is nevertheless important. More striking, it may actually turn out to be a positive and constructive step forward in the drive to address global climate change through meaningful international cooperation. Why do I say that?

The Current Situation

The Kyoto Protocol, which essentially expires at the end of 2012, divides the world into two competing economic camps. Emission reductions are required for only the small set of “Annex I countries” (essentially those nations that used to be thought of as comprising the industrialized world). Such reductions will not reduce global emissions, and whatever is achieved would be at excessive cost, because of having left so many countries and so many low-cost emissions-reduction opportunities off the table. Furthermore, that dichotomous distinction is by no means fair: more than 50 non-Annex I countries now have higher per capita incomes than the poorest of the Annex I countries. (I have written about this and other issues surrounding the Kyoto Protocol in the past: Defining Success for Climate Negotiations in Cancun; Defining Success for Climate Negotiations in Copenhagen; Three Pillars of a New Climate Pact).

The United States did not ratify the Kyoto Protocol, and has made it clear that it will not take on a target under a second commitment period. The U.S. position continues to be that a considerably broader agreement is necessary – one that includes commitments not only from the Annex I (industrialized) countries, but also from the key emerging economies, such as China, India, Brazil, Korea, Mexico, and South Africa.

For much the same reason, Russia and Japan announced last year that they would not take on post-2012 commitments under the Kyoto Protocol. Further, it is unlikely that Australia will take on such a commitment under Kyoto, essentially leaving the European Union on its own.

On the other hand, the Kyoto Protocol is enthusiastically embraced by the non-Annex I countries (sometimes inaccurately characterized as the “developing countries”), because it holds out the promise of emissions reductions by the wealthiest nations without any responsibilities (costs) borne by others, including the emerging economies.

Because Durban provides the last opportunity to set up post-2012 targets (with time remaining for national ratification actions), it has been anticipated that the negotiations in Durban will re-ignite the divisiveness and recriminations that highlighted the Copenhagen negotiations in 2009 – with verbal hostilities between Annex I countries and non-Annex I countries dominating the discussions at the expense of any other considerations or meaningful actions.

A Positive and Constructive Step Forward

The decision just announced at meetings in Bonn, Germany, by the Canadian delegation that Canada will not take on a target in a second commitment period of the Kyoto Protocol can be a very constructive step forward. This is because it greatly reduces the risk that this year’s annual meeting of the Conference of the Parties in Durban will be dominated by acrimonious debates about a second commitment period for the Kyoto Protocol.

On the contrary, this announcement should encourage the non-Annex I (“developing”) countries, which have been insisting on a second commitment period, to begin to accept the reality that with the United States, Japan, Russia, and now Canada on record as not endorsing a second commitment period for the Kyoto Protocol, it is infeasible for the European Union to go it alone. (Indeed, one might suspect that Australia and most European nations are privately pleased by Canada’s announcement.)

At Cancun, it was encouraging to hear fewer people holding out for a commitment to another phase of the Kyoto Protocol, but it was politically impossible to spike the idea of extending the Kyoto agreement entirely. Instead, it was punted to the next gathering in Durban. Otherwise, the Cancun meeting could have collapsed amid acrimony and recriminations reminiscent of Copenhagen.

Usefully, the Cancun Agreements recognize directly and explicitly two key principles: (1) all countries must recognize their historic emissions (read, the industrialized world); and (2) all countries are responsible for their future emissions (think of those with fast-growing emerging economies). In important ways, this helps move beyond the old Kyoto divide.

The acceptance of the Cancun Agreements last December suggested that the international community may have begun to recognize that incremental steps in the right direction are better than acrimonious debates over unachievable targets. Canada’s announcement should help advance that recognition, and can thereby lead to vastly more productive talks this year in Durban.

5 Responses to Canada’s Step Away From the Kyoto Protocol Can Be a Constructive Step Forward

The constructive interpretation of Canada’s refusal sign a second period of the Kyoto Protocol should only go so far.

True, the Kyoto Protocol does have inherent, material limitations to a workable global agreement on climate change — its perpetuation of the destructive Annex1 /non-Annex 1 divide being chief among them.

But Kyoto did invoke a number of elements that would likely figure into ANY global treaty. On these, Canada has been careless, non-sensical and undiplomatic.

Take Reporting — Canada’s been chronically tardy with submission of National Communications and, most recently, the National GHG Inventory — even later than earthquake struck Japan.

Then there is the veracity of the data — questions have been posed by Parties and Review Teams on the emission projection, impacts of measures estimates, and overall treatment of the energy sector, particularly the oil sands’ emissions.

Then we transgress to the non-sensical.

First, there was the computerized Registry to track kyoto permits. A simple part of the architecture, procurable off-the-shelf for a nominal fee, but the Canadians were so remiss in implementing it that the matter was taken to a formal UN Compliance Committee hearing. Their only companion in the dog-house was Greece… if that says anything.

And then, we arrive at the approach taken to the Kyoto Mechanisms. Here, the policy has been undeniably antithetical to the national interest. For many, the national interest is the development of the oil sands asset. But the GHG mitigation costs in the oil sands (via CCS) are amongst the highest in the world – north of $200/tonne.

One would think the country would have embraced a low-cost migitation option like the CDM. To the contrary. Its been rejected. Its been derided as “Hot Air”. The Canadians took a match to their own get-out-of-jail card — a card that could come in handy right about now when the US EPA is asking for more information on mitigation options as part of their review of the XL Pipeline application.

Then we come to the diplomacy (or lack thereof). For an international treaty to be successful, Parties need to respect both the governing institution and the commitments thereunder.

Take the commitment: Although Canada’s Kyoto target was tough, its wholesale repudiation and non-action in the achievement of that target — whilst remaining a Party to the Protocol — seemed an intentioned, arrogant flaunt to the hortatory nature of international of international. Needless to say, not a constructive precedent for even a “best efforts” future regime.

And then we come to respect for the institution. At the 2009 Special UN Summit on Climate Change in New York, the Canadian Prime Minister, Stephen Harper, skipped the event to go eat donuts. Yes donuts. Chief Wiggum move over.

In summary, by throwing out the bathwater of the Kyoto Protocol, Canada’s action can be seen providing constructive momentum to the consideration of other avenues to address climate change.

But the fact that the baby seems to be going with it, is something that anyone with an interest in a credible global treaty (with strong MRV) and/or the development of Canadian energy assets, should continue to chide them for.

i didn’t realize kyoto was forcing canada to develop the tar sands. it’s unfortunate any such language was included in the agreement, and i’m glad to see the possibility of a more progressive document releasing canadians from that onerous international obligation.

Kyoto wasn’t forcing the Canadians to developed the tar sands — but it provided a cheap mitigation option to address the GHG emissions associated with oil sands development.

Indeed, if you want/need to mitigate oil sands GHG emissions, international offsets is by far the cheapest way to do it — current CER prices of a little under $20 are 1/10 of the estimated cost of CCS.

The main game in town for international offsets is the Kyoto Protocol’s Clean Development Mechanism.

Yet the Canadians have rejected that Mechanism. That’s my point. Kyoto gave them a free call-option on cheap mitigation but they decided to throw that baby out with the bathwater.

On Wall Street, throwing away free calls will get you fired.

On that note, what will be really interesting to watch is whether this policy ever changes.

Think of a scenario where the Americans say, “OK Canada, we’ll give you XL approval, on the condition that you bring the production GHG emissions in line with those associated with other forms of imports (Mid East, Venezuela, etc).”

Canada is then faced with three options: I) Brinksmanship — tell the Americans they’ll sell the bitumen to China instead and see if the US recants; ii) Comply and buy the offset for around $1/barrel; or iii) Comply and install CCS at a few facilities for a weighted compliance cost per bbl of $20.

If I was shareholder and they chose iii) over ii), i’d sue them for being crappy fiduciaries — after all, this would clearly be a case of putting ideology against the “kyoto baby” ahead of shareholder interests.

If I was an American, and they chose i) over ii) and iii), i’d be offended. After all, the Canadians are supposed to be America’s nice neighbour to the North, not some Goldman Sachs-esque oil dealer asking America to pick its poision: Terrorism from the mid-east stuff or GHGs from the Canadian stuff.

Let’s remember, America would be a lot less concerned about from whom it purchased oil if it weren’t for 9/11. The Canadians are effectively acting as opportunists surrounding that horrible event.

As a result, whether your are an American, a Canadian, a shareholder, or anyone else with an interests in the GHG-managed development of the Canadian oil-sands asset, Canada’s behaviour with respect to the architecture of the Kyoto Protocol (as distinct from the targets and the allocation of responsibility between annex 1 and non annex 1) should be chided; not congratulated.

you’re not talking about a reduction curve that keeps us under 450ppm. you’re just talking about how people WISH the planet worked.

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About the Author

Robert N. Stavins is the Albert Pratt Professor of Business and Government, Director of the Harvard Environmental Economics Program, and Chairman of the Environment and Natural Resources Faculty Group.

Disclaimer

The views expressed are solely those of the author and do not imply endorsement by Harvard University, the Kennedy School of Government, or the Belfer Center for Science and International Affairs.
This blog is based in part on columns published by The Environmental Forum, published by the Environmental Law Institute.